Hasbro Announces That It Is Cutting 15% Of It's Global Workforce

[JayC]

Hasbro today put out a press release announcing they will be eliminating approximately 1,000 global full-timo positions in 2023 and Implementing leadership and other organizational changes ahead of their financial results call on February 16th where they are expected to announce that their consumer products business underperformed in the fourth quarter. See the entire press release below:

Hasbro, Inc. (NASDAQ: HAS), a global branded entertainment leader, today announced leadership and organizational changes, including the elimination of approximately 15% of its global workforce this year. The reductions will start to take effect within the next several weeks. With these actions, along with ongoing systems and supply chain investments, the Company is on track to achieve its goal of $250-300M in annual run-rate cost savings by year-end 2025 to drive profitability and reinvestment in core brand growth.

 

 

 

"Despite strong growth in Wizards of the Coast and Digital Gaming, Hasbro Pulse, and our licensing business, our Consumer Products business underperformed in the fourth quarter against the backdrop of a challenging holiday consumer environment," said Chris Cocks, Hasbro chief executive officer.

"We are focused on implementing transformational changes aimed at substantially reducing costs and increasing our growth rates and profitability. While the full-year 2022, and particularly the fourth quarter, represented a challenging moment for Hasbro, we are confident in our Blueprint 2.0 strategy, unveiled in October, which includes a focus on fewer, bigger brands; gaming; digital; and our rapidly growing direct to consumer and licensing businesses. Through this strategy, we are putting the consumer at the center of everything we do, and our Operational Excellence program is on track to drive significant cost savings across the business and improve our overall competitiveness. These strategic pillars helped to improve our results, particularly operating profit margin and revenue growth in key categories, in a challenging fourth quarter, and lay the groundwork for continued progress in 2023."

Preliminary Financial Results

Fourth Quarter 2022 Selected Preliminary Results

Preliminary fourth quarter 2022 revenue of approximately $1.68 billion, down 17% year-over-year; down approximately 14% in constant currency.
Wizards of the Coast and Digital Gaming segment revenue of approximately $339 million, up 22% year-over-year; Consumer Products segment revenue of approximately $1.0 billion, down 26% year-over-year; and Entertainment segment revenue of approximately $335 million, down 12% year-over-year.
Preliminary operating loss margin of 8.3% to 7.5%; Preliminary adjusted operating profit margin of 15.8% to 16.0%, excluding total pre-tax charges of approximately $300 million associated with changes in entertainment and business plans as part of the Blueprint 2.0 strategy, approximately $21 million in pre-tax charges related to amortization of costs from the eOne acquisition, and cash charges of approximately $78 million associated with workforce reductions and related fees associated with the execution of the Blueprint 2.0 strategy.
Preliminary earnings loss per share of $1.00 to $0.93; Preliminary adjusted earnings per diluted share of $1.29 to $1.31, excluding the impact of the charges set forth above.

Full-Year 2022 Selected Preliminary Results

Preliminary full-year 2022 revenue of approximately $5.86 billion, down 9% year-over-year; down approximately 6% in constant currency.
Wizards of the Coast and Digital Gaming segment revenue of approximately $1.33 billion, up 3% year-over-year; Consumer Products segment revenue of approximately $3.57 billion, down 10% year-over-year; and Entertainment segment revenue of approximately $959 million, down 17% year-over-year and down 12% excluding $65 million of revenue associated with the music business which was sold in 2021.
Preliminary operating profit margin of 6.7% to 7.0%; Preliminary adjusted operating profit margin of 15.7% to 15.8%, excluding total pre-tax charges of approximately $520 million, including the Q4 charges described above and $120 million recognized through the third quarter 2022.
Preliminary earnings per diluted share of $1.40 to $1.46; Preliminary adjusted earnings per diluted share of $4.43 to $4.45, excluding the impact of the charges set forth above.

Leadership and Organizational Changes

In October 2022, the Company announced a goal of delivering $250-300 million in annualized run-rate cost savings by year-end 2025. In alignment with this program’s objectives, the Company is undertaking organizational changes that will result in the elimination of approximately 1,000 positions from its global workforce this year, or approximately 15% of global full-time employees. The changes will include a new organizational model, commercial alignment, and leadership changes that the Company will discuss in more detail on its upcoming earnings conference call.

"The elimination of these positions will impact many loyal Hasbro employees, and we do not undertake this process lightly. However, the changes are necessary to return our business to a competitive, industry-leading position and to provide the foundation for future success," said Cocks.

As part of these organizational and commercial changes, Eric Nyman, president and chief operating officer, is departing Hasbro. At this time, the Consumer Products business will report directly to the CEO.

"We are grateful for Eric’s dedication to Hasbro over the last 18 years and the leadership he has provided. On behalf of everyone at Hasbro, we wish him well in his future endeavors," said Cocks.

These preliminary results for 2022 are an estimate, based on information available to management as of the date of this release, and are subject to further changes upon completion of the Company’s quarter and year-end procedures. Hasbro’s preliminary financial results should not be viewed as a substitute for full audited financial statements prepared in accordance with U.S. GAAP, and undue reliance should not be placed on these preliminary financial results. Hasbro’s independent registered public accounting firm has not audited the preliminary financial results included in this press release or expressed any opinion or other form of assurance on such preliminary financial results. In addition, items or events may be identified or occur after the date of this press release due to the completion of operational and financial closing procedures, final audit adjustments and other developments that may require Hasbro to make material adjustments to the preliminary financial results included in this press release.

Conference Call & Webcast

Hasbro will webcast its fourth quarter and full-year 2022 earnings conference call on Thursday, February 16, 2023, at 8:30 a.m. Eastern Time. The webcast and the accompanying presentation slides will be available to investors and the media on Hasbro’s Investor Relations home page at https://investor.hasbro.com/. A replay of the call will be available at the same location approximately two hours following completion of the event.

Certain financial and statistical information included in the webcast, such as information required by Regulation G, will be available at the time of the webcast on Hasbro’s Investor Relations website at https://investor.hasbro.com.

About Hasbro

Hasbro is a global branded entertainment leader whose mission is to entertain and connect generations of fans through the wonder of storytelling and exhilaration of play. Hasbro delivers engaging brand experiences for global audiences through gaming, consumer products and entertainment, with a portfolio of iconic brands including MAGIC: THE GATHERING, DUNGEONS & DRAGONS, Hasbro Gaming, NERF, TRANSFORMERS, PLAY-DOH and PEPPA PIG, as well as premier partner brands.

Hasbro is guided by our Purpose to create joy and community for all people around the world, one game, one toy, one story at a time. For more than a decade, Hasbro has been consistently recognized for its corporate citizenship, including being named one of the 100 Best Corporate Citizens by 3BL Media, one of the World’s Most Ethical Companies by Ethisphere Institute and one of the 50 Most Community-Minded Companies in the U.S. by the Civic 50. For more information, visit corporate.hasbro.com.

© 2023 Hasbro, Inc. All Rights Reserved.

[Artoyz]

Hasbro!

[memocromatico]

Ah, the beginning of the end? On one hand, this sounds like they're shifting away from brick and mortar stores and more into direct to consumer stuff which would make sense to let their people at big stores go... and on the other hand, I can't help but feel like the investors are so disconnected from the rest of the world that "not meeting their profit" means absolute failure... and I really don't like that. 

[80sboy4]

So let's get this straight, Hasbro raised prices, reduced packaging materials with this windowless packaging, which should have saved them money but no guess not. So now they are firing people , makes absolutely zero sense but that's big corporations for you.

[Batfreak87]

5 hours ago, 80sboy4 said:

So let's get this straight, Hasbro raised prices, reduced packaging materials with this windowless packaging, which should have saved them money but no guess not. So now they are firing people , makes absolutely zero sense but that's big corporations for you.

you are totally right. None of them make any sense. None of this makes any sense. Seems cold and unfair. 

[Goldbug]

you mean raising prices won't increase sales?! *GASP*  /sarcasm
the CEO should also be fired

[UnknownQuantity]

CORRECT headline: CEOs And Do-Nothing Investors Pay For Multi-Million Dollar Salaries And Portfolios By Screwing Customers And Employees.

#FTFYTNI